RASGCO_Monthly_Tax_Updates_May_2021

MONTHLY UPDATES
MAY, 2021

- INCOME TAX LAWS

- SALES TAX LAWS

RIAZ AHMAD, SAQIB, GOHAR & CO. A member of
Chartered Accountants

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Preamble:

Riaz Ahmad, Saqib, Gohar & Co. Chartered Accountants is pleased to present herewith its “Tax
Updates” for the month of May, 2021. This document aims to provide an update with respect to
the changes in the Income Tax Ordinance, 2001 (the Ordinance) and the Sales Tax Act, 1990 (the
Act) and related rules therein, introduced through various SROS/circulars issued during the
month of May, 2021.

Disclaimer: This memorandum is prepared to the best of our knowledge and belief. It is
intended to provide only a general outline of the matters covered in the document. It should
neither be regarded as comprehensive nor sufficient for decision making purposes nor should
it be used in place of professional advice. Riaz Ahmad, Saqib, Gohar & Co. Chartered
Accountants does not accept any responsibility for any loss arising due to any action taken or
not taken by the readers of this publication.

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UPDATES PERTAINING TO FEDERAL S.No. SRO Ref. Amendment
INCOME TAX LAWS – 2. 132(I)/2021
 The Expression
EXEMPTION ON IMPORT OF OXYGEN, 12(I) in the said
OXYGEN TANKS AND OXYGEN SRO may be read
CONCENTRATORS – SRO 589(I)/2021: as 12(J) and

Through SRO 589(I)/2021 dated May 25,  The expression
2021 the Federal Board of Revenue has 12(J) in the said
provided exemption from the deduction of SRO may be read
income tax under Section 148 of the as 12(K)
Ordinance on import of Oxygen, Oxygen
Cylinders, Cryogenic tanks and Oxygen 3. 235(I)/2021  The expression
concentrators. 12(J) in the said
SRO may be read
as 12(K) and

The above exemption is valid for a period of  The Expression
180 days from May 14, 2021 and is one of 12(K) in the said
the measures to cater for the rise in demand SRO may be read
of the above items in view of the on-going as 12(L).
pandemic.
STOPPAGE OF PHYSICAL/FACE-TO-FACE
CLERICAL AMENDMENTS IN PREVIOUS HEARINGS – CIRCULAR DATED MAY 18,
SROs – CORRIGENDUM DATED MAY 17, 2021.
2021:
The Federal Board of Revenue has issued a
Through the Corrigendum dated May 17, letter bearing Ref. No. F.No.1(7)Chief(IR-
2021, the Federal Board of Revenue has Formations)/2021-62658-R dated May 18,
made certain clerical amendments with 2021 addressed to all the Chief
regards to clause references in previous Commissioners Inland Revenue (except LTO
SROs, the details of which are as under: Islamabad and RTOs of Rawalpindi,
Faisalabad and Peshawar).
S.No. SRO Ref. Amendment
1. 99(I)/2021 In the afore-said letter, the field formations
 The Expression were informed regarding the testing phases
12(H) in the said of dedicated hearing rooms and e-hearing to
SRO may be read be conducted. All field formations were
as 12(I) and instructed to make available dedicated e-
hearing rooms and it was intimated that with
 The Expression effect from July 01, 2021, all hearings would
12(I) in the said be conducted from such hearing rooms and
SRO may be read the traditional face-to-face hearings/across
as 12(J) the table hearings would be stopped from
that date.

It remains to be seen how effective this Page |3
measure would be, especially considering
the fact that there are many taxpayers who DUE DATE FOR DISPOSAL OF MANUALLY
would have logistic issues and lack the know FILED APPEALS – CORRIGENDUM DATED
how in operating the e-hearing module MAY 24, 2021:
being developed. Through its corrigendum dated May 24,
2021, the Federal Board of Revenue has
ISSUANCE OF SHOW-CAUSE NOTICES FOR extended the due date for disposal of
THE TAX YEAR 2015: manually filed appeals (for tax years 2014
and onwards) with the office of the
The field formations of the Federal Board of Honorable Commissioner Inland Revenue
Revenue had recently issued show-cause (Appeals) from June 30, 2021 to December
notices to a number of taxpayers for the tax 31, 2021.
year 2015 on the basis of assumptions and
while making roving inquiries in order to “Document continued on next page”
raise demands.

The matter was taken up by various Tax Bar
Associations operating within Pakistan and
highlighted at the Board level.

Resultantly, a letter bearing Ref. No.
2(22)Rev.Bud/2020 dated May 25, 2021 was
addressed to all Chief Commissioners Inland
Revenue.

Wherein the Federal Board of Revenue has
clarified the matter that notices issued on
the basis of assumptions and not backed by
“definite information” were unlawful and all
field formations were instructed to refrain
for opening any proceedings based on
assumptions and surmises.

Furthermore, all field formations were
instructed to provide an adequate
opportunity of being heard to all taxpayers
as well.

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UPDATES PERTAINING TO FEDERAL SALES
TAX LAWS –

CHANGE IN SALES TAX RATES ON
PETROLEUM PRODUCTS – SRO 551(I)/2021:

Through its SRO 551(I)/2021 dated May 09,
2021, the Federal Board of Revenue has
changed the rate of sales tax applicable on
petroleum products as follows:

Description Previous Amended
Rate Rate
Motor spirit
excluding Rs. 14.48 17% ad
HOBC per litre valorem
High Speed
Diesel oil Rs. 29.57 17% ad
Kerosene per litre valorem
Rs. 10.40 15.44%
Light Diesel oil per litre ad
valorem
Rs. 9.63 7.56% ad
per litre valorem

EXEMPTION ON IMPORT OF OXYGEN,
OXYGEN TANKS AND OXYGEN
CONCENTRATORS – SRO 590(I)/2021:

Through its SRO 590(I)/2021 dated May 25,
2021, the Federal Board of Revenue has
exempted the import Oxygen, Oxygen
Cylinders, Cryogenic tanks and Oxygen
concentrators from the levy of sales tax at
import stage.

The above exemption is valid for a period of
180 days from May 14, 2021 and is one of
the measures to cater for the rise in demand
of the above items in view of the on-going
pandemic.

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